Author: therawinformant

The SEEK Limited (ASX: SEK) share price has returned from its trading halt and sunk lower on Monday.

At the time of writing, the job listings giant’s shares are down 5% to $20.43 after responding to a short seller attack.

What was the short seller attack?

On Thursday, Blue Orca Capital released a short seller report claiming, amongst other things, that SEEK’s China-based Zhaopin business was operating with fake listings and paying student to create fake resumes.

Blue Orca’s commented: “Zhaopin’s platform is inundated with fake postings by companies which were deregistered, in liquidation or flagged as abnormal operations.” It also claimed to have contacted companies about their job postings on the website and was told “that the postings were fraudulent.”

The short seller went so far as to describe the Zhaopin platform as “rotten” and “devastating for Seek’s prospects.”

And finally, its analysts claim that SEEK is giving off a false impression that it is generating healthy profits and cash flows by paying dividends. However, it believes these payments have “largely been funded by debt.”

As a result of the above, Blue Orca believes that SEEK’s shares are worth just $7.20. This compares to its last close price of $21.51, which implies potential downside of 66%.

What was SEEK’s response?

This morning SEEK responded to Blue Orca’s “inaccurate statements” and allegations that it stated are “unsubstantiated.”

The company said: “We believe the goal of the Report is to use speculative assertions to generate adverse publicity and then draw SEEK into a public debate, which is consistent with the usual practice of short-seller firms. The fullness of SEEK’s market disclosures ensures that market participants have a great deal of information against which to assess the merit, or lack thereof, of claims such as those in the Report.”

Nevertheless, it has responded to the report’s assertions and strongly disagrees with them.

It notes that Zhaopin strives to be an industry leader in dealing with fake ads and candidate CVs which do occurs on all job listings websites globally. It feels the allegations are greatly exaggerated and misleading.

In respect to its accounting matters, the company advised that the report makes unsubstantiated claims in relation to its accounting practices. It notes that these appear to criticise the company for complying with IFRS standards.

Finally, also of note, SEEK defended its cash flows and points out that it has a long track record of generating strong  operating cash flows. This includes its Zhaopin business, which has resulted in it having a net cash position of ~$222 million at the end of June. 

More reading

• 5 things to watch on the ASX 200 on Monday
• 5 things to watch on the ASX 200 next week
• Why ANZ Bank, JB Hi-Fi, Northern Star, & SEEK shares are dropping lower
• The Seek Ltd (ASX:SEK) share price under attack by offshore shorter
• ASX 200 down 1.1%: ANZ cash earnings down 42%, SEEK slammed, HUB24 jumps

Motley Fool contributor James Mickleboro owns shares of SEEK Limited. The Motley Fool Australia has recommended SEEK Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The Austal Limited (ASX: ASB) share price has dipped slightly today following the announcement of a completed vessel delivery.

In early-morning trade, the Austal share price is down 0.18% to $2.70. In comparison, the All Ordinaries Index(ASX: XAO) is also flat on 6,134 points.

What does Austal do?

Austal designs and manufactures high performance vessels for commercial and defence customers worldwide. Most notably, Austal builds and services warships for the Australian Royal Navy and the United States Navy.

Patrol boat delivery

The global defence shipbuilder delivered its eighth guardian class patrol boat to the Australian Department of Defence.

Under the Pacific Patrol Boat Replacement project, the vessel, VOEA Ngahau Siliva, was gifted to the Kingdom of Tonga. This is the eighth ship delivered since December 2018 and the second Guardian-class patrol boat to Tonga.

The formal handover was conducted at Austal Australia’s Henderson shipyard last Friday. The Tongan crew will now depart for their home country with further training and familiarisation at HMAS Stirling, Garden Island.

The vessel will be used for improved seakeeping (border patrols), regional policing, search and rescue and many other operations domestically and internationally.

Commenting on the transfer, Austal CEO Patrick Gregg said:

With this second vessel delivery to Tonga, we have now delivered eight of the 21 Guardian- class Patrol Boats contracted to the Australian Department of Defence. We’re actually completing a vessel every three months and at any given time, we have five vessels under construction or fitout.

The Pacific Patrol Boat Replacement project was awarded to Austal in May 2016. The shipbuilder was granted an additional contract option, taking the program to 21 vessels. The total value of the contract is estimated to be more than $335 million.

Twelve Pacific Island nations including Papua New Guinea, Fiji, Samoa, Vanuatu and others will receive the vessels through to 2023.

About the Austal share price

The Austal share price took a 13% hit last week, following the broader ASX market sell-off. Overall, shares in the defence company haven’t fared well with a 30% decline since the start of the year.

Austal has a market capitalisation of $974 million and a price-to-earnings (P/E) ratio of 10.9. This can be seen as quite cheap as investors are paying $10.90 for every $1 in last year’s profit. The average price-to-earnings (P/E) ratio for the defence industry is around 18.8.

More reading

• ASX 200 Weekly Wrap: ASX 200 has another shocker as US election approaches
• Top ASX shares to buy in November 2020
• Buy these 3 ASX stocks that hit a 52-week low during this market meltdown
• Why the Fluence (ASX:FLC) share price is up 10% today
• Why the CV Check (ASX:CV1) share price is edging lower today

Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Austal Limited. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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Red 5 Limited (ASX: RED) is a step closer to production at its King of the Hills (KOTH) deposit in WA.  The company awarded the engineering, procurement and construction contract (EPC),  for the Process Plant to Maca Ltd (ASX: MLD). This contract covers the processing facility, equipping of the bore fields,  high voltage power distribution, workshop, warehouse and bulk earthworks. It has been awarded as a fixed price contract, and also includes bulk earthworks. The Red 5 share price dipped slightly at market open this morning, dropping 3.64% in the first few moments of trade.

Why is the Red 5 share price in focus?

Located in the eastern goldfields region, King of the Hills, has been in production since 2018 from the rich gold veins mined via underground mining. However, the company has identified a bulk mining opportunity to mine lower grade deposits between the rich seams. Consequently, the resource estimate raised to 90.7 Mt at 1.4 g/t Au for 4.07 Moz of contained gold.

MACA has a strong track record of the construction of similar carbon‐in‐leach (CIL) processing plants. In addition, spending will total $143 million at completion of this contract, which is 82% of the total capital budget of $188 million.

Other commitments besides this contract include;

• Purchase of 240‐bed camp accommodation, water and waste water treatment plants and central facilities;
• Design and construction contract for a 450‐person village;
• 6Mtpa gyratory crusher and 4Mtpa SAG mill; and
• Early Works Agreement with APA Group (ASX: APA) for the gas pipeline lateral.

The EPC contract provides for two phases. The first is limited to $50 million and Phase 2 is for the remainder of the contract value, which will be released at the discretion of Red 5, based on the status of debt financing.

The Red 5 share price has been flagging over the past month, falling 11.2% after rising early in the year. 

Management commentary

Red 5 managing director Mark Williams counts the awarding of the EPC contract as an important milestone for the company. Moving it a step closer to being a mid-tier, multi operational gold miner:

Our decision to award these key contracts and make commitments to significant long‐lead items prior to completing project debt funding reflects our confidence in the robustness of the King of the Hills Project.

Importantly, the commitments made to date are below budget for this stage of the KOTH Project, and should give our stakeholders confidence that we are well on track to progress the  development of this major project, with production planned to start in June Quarter 2022.

Company performance

The Red 5 share price has seen a volatile year and is presently 16.6% down in year to date trading. It is currently selling at a price to earnings (P/E) ratio of 85.67. King of the Hills is a major gold deposit and within the nation’s top 20 gold deposits.

By comparison, market darling Bellevue Gold Ltd (ASX: BGL) contains 2.2 Moz, albeit at a far higher grade.

More reading

• Why the Bellevue (ASX:BGL) share price is dropping lower

Motley Fool contributor Daryl Mather has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The S&P/ASX 200 Index (ASX: XJO) has had another week of painful losses – in fact, its worst since late April. The 3.4% that the ASX 200 shed over the week translated into the index finishing up decisively under the 6,000-point threshold.

Last week’s moves capped off a disappointing end to the month, with the ASX 200 losing close to 5% since 19 October.

The causes for this dramatic drop? There are 2 main factors in my opinion. Firstly, the number of coronavirus cases, whilst thankfully stable in Australia, has been rising on a global scale. Over in the United States, commentators are starting to call a ‘third wave’, as the number of cases has exploded over the past month or so. Over in Europe, France, Germany and the United Kingdom have recently gone into lockdown as well.

This situation obviously doesn’t bode well for global growth and is one of the reasons I think the ASX 200 has been losing steam.

US election enters final stretch

Secondly, the US elections are just around the corner (this week in fact). Although polling is still indicating (and markets are still arguably pricing in) a loss for President Donald Trump and a Democratic win under Joe Biden, fears over a contested election or similar event have also been brewing over the past week as crunch time looms.

Markets hate uncertainty at the best of times. Thus, the prospect of severe political uncertainly and possible unrest in the world’s largest economy (with the risks of the pandemic thrown in) isn’t exactly a recipe for higher shares prices.

In ASX news, we also had a flurry of activity on the markets last week, despite the negative sentiment. Monday kicked things off with the news that Coca-Cola Amatil Ltd (ASX: CCL) has received a takeover offer from the European Coke bottler Coca-Cola European Partners PLC (NYSE: CCEP). This saw Amatil shares jump 16% on the day (more on that later).

Likewise, we saw embattled wealth manager AMP Limited (ASX: AMP) also receive some buyer interest from across the Pacific. AMP management confirmed on Friday that Ares Management Corp (NYSE: ARES) has issued an indicative, non-binding and (as yet) undisclosed takeover proposal for the Australian institution. Nevertheless, AMP shares ended almost 20% higher on Friday (again, more coming).

How did the markets end the week?

Not too well, as we’ve already flagged. The ASX 200 started the week at 6,167 points and ended up at 5,927.6 points for a week-to-week loss of 3.4%. But let’s have a look at how the week panned out.

Monday started off small, with a loss of just 0.2%. But Tuesday saw the bears really step on the gas, leading the ASX 200 to a hefty 1.7% loss (its worst for the month so far). Wednesday saw something of a recovery, with a 0.1% raise, but this was quickly forgotten as Thursday brought another brutal sell-off with a 1.6% fall. Friday’s more muted 0.55% fall sealed the deal for a week of heavy losses on the ASX 200.

Meanwhile, the All Ordinaries Index (ASX: XAO) also had a tough week, starting off at 6,373.7 points and finishing up at 6,113.2 points for a loss of 3.7% over the week.

Which ASX 200 shares were the biggest winners and losers?

Time for our Foolish equivalent of the old newspaper gossip pages. So stoke the fire and put the kettle on while we have a look at the biggest winners and losers for the week. As always, we’ll start with the losers:

Worst ASX 200 losers	% loss for the week
Western Areas Ltd (ASX: WSA)	(20.78%)
EML Payments Ltd (ASX: EML)	(18.43%)
Corporate Travel Management Ltd (ASX: CTD)	(16.14%)
Zip Co Ltd (ASX: Z1P)	(15.13%)

Tech and travel shares were the companies investors seemed to want to eject last week. But our week’s wooden spoon goes to nickel producer Western Areas. Investors were hitting the sell button after the company downgraded its production guidance for FY2021 due to issues at one of its operations.

EML Payments wasn’t too far behind with an 18.4% drop last week. No major news was out for this company, so we can only assume it got caught up with the broader tech sell-off and fell hard due to its previously strong gains over the month.

We can probably say the same for Zip Co, although investors have been cooling on this buy now, pay later company for a few weeks now.

As for Corporate Travel, I assume last week’s hefty drop was due to a combination of negative sentiment from its recent annual general meeting, as well as the explosion of COVID cases around the world that we discussed earlier. That obviously isn’t good news for a travel company.

With the losers out of the way, let’s now check out last week’s winners:

Best ASX 200 gainers	% gain for the week
Coca-Cola Amatil Ltd (ASX: CCL)	15.63%
AMP Limited (ASX: AMP)	12.5%
Blackmores Limited (ASX: BKL)	12.29%
ResMed CDI (ASX: RMD)	8.47%

In a week of such heavy losses on the ASX 200, it is strange to see such healthy numbers in the winners’ column!

The aforementioned Coca-Cola Amatil and AMP took out the gold and silver medals last week. With Amatil, prospective buyer Coca-Cola European Partners offered $12.75 per share in cash for the company, so investors were very keen to bump up the Amatil share price to within striking distance of this number.

And although AMP’s takeover proposal from Ares hasn’t got a price tag behind it yet, investors are very clearly excited about a possible exit door from the company — a sad day for a once-proud institution, if I may say so.

Meanwhile, Blackmores shares were on fire after last week’s annual general meeting revealed the company is on course for profit growth in FY2021.

Finally, Resmed shares were in demand as the company delivered an unexpectedly strong quarterly update, thanks in no small part to strong demand for ventilators as a result of the pandemic.

What does this week look like for the ASX 200?

I’m not going to sugarcoat this: I think this week has the potential to deliver some extreme volatility to the share market in light of the US elections.

A strong result either way on Wednesday (our time) could well produce some relief-driven gains. It’s possible we will get some idea of the outcome before market close on Wednesday, so put that in the calendar. However, I think investors should brace for the worst as we start the week. If the result is extremely close, we could be in for a very bruising few months, and the markets will (in my view anyway) not like this outcome at all. Whatever happens, I’m expecting a bumpy ride.

In other news, the Reserve Bank of Australia (RBA) is meeting on Tuesday for their monthly check-in. Most commentators are expecting the RBA to slash interest rates yet again to yet another all-time low, possibly 0.1%. Get ready to get even less bang for your buck from your saving account in November!

Finally, we’ll be hearing from both Westpac Banking Corp (ASX: WBC) and National Australia Bank Ltd (ASX: NAB) next week when the banks deliver their full-year results. It will be interesting to see what these companies have up their sleeves in terms of dividends in particular.

But before we go, here’s a comprehensive look at how NAB, Westpac and all of the ASX 200 blue chips are looking as we start the week:

More reading

• Westpac (ASX:WBC) posts 62% cash earnings decline in FY 2020
• 3 ASX blue chip shares to buy for dividends
• 5 things to watch on the ASX 200 on Monday
• Top brokers name 3 ASX shares to sell next week
• What to expect from the Westpac (ASX:WBC) FY 2020 result

Sebastian Bowen owns shares of Coca-Cola, National Australia Bank Limited, Newcrest Mining Limited, and Telstra Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of CSL Ltd. and ZIPCOLTD FPO. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. recommends EML Payments. The Motley Fool Australia owns shares of and has recommended Blackmores Limited, Corporate Travel Management Limited, EML Payments, Macquarie Group Limited, and Telstra Limited. The Motley Fool Australia owns shares of COLESGROUP DEF SET, Transurban Group, Wesfarmers Limited, and Woolworths Limited. The Motley Fool Australia has recommended ResMed Inc. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The Westpac Banking Corp (ASX: WBC) share price will be in focus this morning following the release of its full year results.

How did Westpac perform in FY 2020?

For the 12 months ended 30 September, Australia’s oldest bank reported a 66% decline in statutory net profit to $2,290 million.

Things were equally as bleak for its cash earnings, which fell 62% year on year to $2,608 million or 63% to 72.5 cents per share.

However, this was largely in line with expectations. Analysts at Goldman Sachs, for example, were expecting Westpac to deliver a 63% decline in cash earnings before one-offs to $2,535 million.

Excluding notable items, cash earnings dropped 34% to $5,227 million.

Goldman also pencilled in a final dividend of 25 cents per share, with no interim dividend being paid for FY 2020.

That estimate was a little wide of the mark, with the bank declaring a 32 cents per share fully franked final dividend.

Other key metrics of note were its net interest margin of 2.08% (down 4 basis points) and its CET1 capital ratio of 11.13%. The latter is comfortably ahead of requirements.

Westpac Group CEO, Peter King, commented: “2020 has been a particularly challenging year and our financial result is disappointing. Our earnings have been significantly impacted by higher impairment charges, increased notable items and the sharp decline in economic activity.”

”At the same time, we have incurred higher expenses due to increased resourcing to handle unprecedented COVID-19 demands and fixing our compliance issues,” he added.

However, Mr King was pleased with the strength of its balance sheet.

He said: “We have, however, continued to maintain the strength of Westpac’s balance sheet. Our Common Equity Tier 1 capital ratio is at 11.13%. Customer deposits were up 6% over the year, with the deposit to loan ratio now more than 80%.”

Deferral update.

Westpac now has $16.6 billion in Australian home loans in deferral (41,000 mortgage accounts).

This has reduced from $54.7 billion or 146,000 mortgage accounts.

A further $1.0 billion in Australian small business loans are in deferral (4,300 small business customers). This is down from $10.1 billion or 32,900 small business customers.

Outlook.

Mr King advised that although Westpac expects economic growth to improve through 2021 and 2022, it also expects unemployment to remain elevated for some time.

He added: “We remain in an uncertain economic environment, however the recent budget has provided significant stimulus to businesses and households. Our economists expect at least half the personal tax cuts will be spent and businesses will respond to the generous depreciation allowances.”

Mr King said that despite the tough operating environment, Westpac remained well capitalised with a strong balance sheet and ample liquidity to continue to support its customers.

He believes this leaves Westpac well placed to continue to support customers through the crisis.

He concluded: “With our three priorities of fix, simplify and perform, we are becoming a simpler and stronger bank with a renewed focus on a culture to execute and improve performance.”

More reading

• 3 ASX blue chip shares to buy for dividends
• 5 things to watch on the ASX 200 on Monday
• What to expect from the Westpac (ASX:WBC) FY 2020 result
• 5 things to watch on the ASX 200 next week
• Reserve Bank tipped to cut rates to record lows next week

Motley Fool contributor James Mickleboro owns shares of Westpac Banking. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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There are some ASX blue chip shares that offer really good potential dividend income.

I’m not talking about businesses like Commonwealth Bank of Australia (ASX: CBA), Westpac Banking Corp (ASX: WBC), Australia and New Zealand Banking Group Ltd (ASX: ANZ) and National Australia Bank Ltd (ASX: NAB). I am also not talking about Telstra Corporation Ltd (ASX: TLS) or BHP Group Ltd (ASX: BHP).

I believe it’s important to find blue chip shares that still have plenty of potential earnings growth left. If a business is growing earnings then it has much more chance of maintaining and growing the dividend.

There are some ASX blue chip shares worth buying for dividends in my opinion:

Magellan Financial Group Ltd (ASX: MFG)

Magellan is a fund manager that focuses on investing in international shares. The great thing about a funds management business is that they don’t require much capital to expand. The ASX fund manager has been steadily growing its funds under management (FUM) for many years. It now has over $100 billion of FUM.

As the FUM grows then Magellan’s core earnings grow from the management fees. It also regularly generates performance fees for shareholders because of how consistently it manages to outperform the global share market.

The ASX blue chip share has plenty of other avenues for growth including an incoming retirement product and other investments like its stake in new investment bank Barrenjoey.

It offers a partially franked dividend yield of 3.9%. That’s a solid starting yield as it continues to grow over time.

Brickworks Limited (ASX: MFG)

I think that the market-leading bricks business could be one of the best ASX dividend shares.

Its dividend hasn’t been cut for over 40 years, including through COVID-19, so it has given shareholders a very reliable source of income.

Whilst a lot of the ASX blue chip share is focused around the construction products of the business – bricks, paving, masonry, roofing, precast and so on – but it’s actually other defensive, quality assets that fund Brickworks’ dividend.

It owns half of an industrial property trust along with Goodman Group (ASX: GMG) that will soon count Amazon and Coles Group Ltd (ASX: COL) as tenants in huge distribution warehouses. The net income of the trust is a sizeable part of funding Brickworks’ dividend.

The other important part is its shareholding of Washington H. Soul Pattinson and Co. Ltd (ASX: SOL) that it owns almost 40% of. Brickworks receives growing dividends from the investment conglomerate. Brickworks doesn’t need the cashflow of its construction business to pay its dividend. 

At the current Brickworks share price it offers a grossed-up dividend yield of 4.9%.

Wesfarmers Ltd (ASX: WES)

Wesfarmers is a diversified company which owns a variety of businesses including Bunnings, Officeworks, Kmart, Target and Catch.

It has done a great job to expand over the years and become the clear market leader in home improvement. Bunnings is a fantastic retailer, it may be the best in the country.

FY20 was a great performance by Bunnings. Revenue went up by 13.9%. It generated a return on capital of 58%, up from 50.5% in FY19. Its earnings before tax (EBT) margin (excluding property) improved from 11.7% to 12.1%. The performance of Bunnings is imperative for Wesfarmers because it generates around two thirds of the profit. Growth of Bunnings profit will help grow Wesfarmers’ dividend. 

Wesfarmers continues to invest in new businesses which diversifies and expands its addressable market. In hindsight, Catch was a fantastic acquisition and it’s capitalising on the huge growth of e-commerce. In the second half of FY20 Catch grew its gross transaction value by 75.5%.

I like that Wesfarmers can continue to alter its holdings towards the future growth opportunities, like it did with Coles. That’s one of the main reasons why I think it’s a great ASX blue chip share for future dividends. . 

At the current Wesfarmers share price it has an ordinary grossed-up dividend yield (based on $1.52 per share) of 4.7%. In my opinion, it’s always a solid ASX dividend share for shareholders.

More reading

• 5 things to watch on the ASX 200 on Monday
• What to expect from the Westpac (ASX:WBC) FY 2020 result
• Top ASX shares to buy in November 2020
• Top brokers name 3 ASX shares to buy next week
• 5 things to watch on the ASX 200 next week

Motley Fool contributor Tristan Harrison owns shares of Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia owns shares of and has recommended Brickworks, Telstra Limited, and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia owns shares of COLESGROUP DEF SET and Wesfarmers Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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On Friday the S&P/ASX 200 Index (ASX: XJO) was out of form and dropped lower. The benchmark index fell 0.55% to 5,927.6 points.

Will the market be able to bounce back from this on Monday? Here are five things to watch:

ASX 200 expected to jump higher.

The Australian share market looks set to start the week on a strong note. According to the latest SPI futures, the ASX 200 is expected to open 51 points or 0.9% higher this morning. This is despite a disappointing end to the week on Wall Street, which saw the Dow Jones fall 0.6%, the S&P 500 drop 1.2% and the Nasdaq sink 2.45% lower. 

Westpac full year results.

The Westpac Banking Corp (ASX: WBC) share price will be one to watch this morning when it releases its full year results. According to a note out of Goldman Sachs, it expects the banking giant to report cash earnings before one-offs of $2,535 million. This will be a 63% decline on the prior corresponding period. The broker has also pencilled in a final dividend of 25 cents per share, with no interim dividend being paid for FY 2020.

Oil prices continue to slide.

It could be a tough start to the week for energy producers such as Santos Ltd (ASX: STO) and Woodside Petroleum Limited (ASX: WPL) after oil prices continued their slide. According to Bloomberg, the WTI crude oil price fell 1.05% to US$35.79 a barrel and the Brent crude oil price dropped 0.8% to US$37.94 a barrel. This led to oil prices dropping to five-month lows.

Gold price rebounds.

Gold miners including Newcrest Mining Limited (ASX: NCM) and Northern Star Resources Ltd (ASX: NST) will be on watch on Monday after the gold price rebounded on Friday night. According to CNBC, the spot gold price rose 0.65% to US$1,879.90 an ounce after the US dollar rally stalled.

SEEK to return from trading halt.

The SEEK Limited (ASX: SEK) share price is due to return from its trading halt on Monday. On Thursday SEEK requested a trading halt whilst it prepared a response to a short seller’s report issued by Blue Orca Capital. The short seller has alleged that SEEK’s China business is full of fake listings and resumes.

More reading

• What to expect from the Westpac (ASX:WBC) FY 2020 result
• Top ASX shares to buy in November 2020
• These were the worst performing shares on the ASX 200 in October
• Is it time to buy ASX gold shares?
• These were the best performing shares on the ASX 200 in October

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has recommended SEEK Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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Once again, a large number of broker notes hit the wires last week. Some of these notes were positive and some were bearish.

Three sell ratings that caught my eye are summarised below. Here’s why top brokers think investors ought to sell these shares next week:

Blackmores Limited (ASX: BKL)

According to a note out of Citi, its analysts have retained their sell rating and $60.50 price target on this health supplements company’s shares. This follows the release of a trading update at its annual general meeting. While it is pleased with the progress Blackmores is making with cost cutting, it has concerns over its softening sales. In light of this and increased competition in Australia, it sees no reason to change its rating any time soon. The Blackmores share price ended the week at $70.26.

Fortescue Metals Group Limited (ASX: FMG)

Analysts at Morgan Stanley have retained their underweight rating and $14.10 price target on this iron ore producer’s shares. According to the note, Fortescue delivered a first quarter update that was largely in line with its forecasts. It also notes that the company has held firm with its guidance for FY 2021. Nevertheless, it believes the company’s shares are overvalued at the current level and holds firm with its underweight rating. The Fortescue share price was fetching $17.37 at Friday’s close.

Pilbara Minerals Ltd (ASX: PLS)

Another note out of Citi reveals that its analysts have retained their sell rating and 32 cents price target on this lithium miner’s shares following its quarterly update. Although the broker has lifted its FY 2021 forecast to account for Pilbara Minerals’ updated guidance, the broker remains concerned by weak lithium prices. It thinks investors should wait for a meaningful recovery in lithium prices before considering an investment. The Pilbara Minerals share price ended the week at 42 cents.

More reading

• How La Nina will create unexpected ASX stock winners and losers
• These were the best performing shares on the ASX 200 last week
• The next ASX 200 stock that can pay a special dividend in the near-term
• Brokers name 3 ASX shares to buy right now
• How ASX investors can capture these ‘billionaire trends’

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Blackmores Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The post Top brokers name 3 ASX shares to sell next week appeared first on Motley Fool Australia.

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On Monday morning all eyes will be on the Westpac Banking Corp (ASX: WBC) share price when it hands in its full year results for FY 2020.

Ahead of the release, I thought I would take a look to see what is expected from the banking giant.

What is the market expecting from Westpac in FY 2020?

First things first, the market is expecting some hefty notable items for the second half of FY 2020.

Last week the company revealed that its second half cash earnings will be reduced by $1,220 million after tax due to notable items.

These include $568 million of goodwill and intangible write-downs related to its Westpac Life Insurance Services and Auto Finance businesses, along with a write-down of capitalised software.

In addition, the company revealed $415 million from additional provisioning for AUSTRAC related matters and an additional $182 million in provisions for customer refunds, the implementation of the remediation program, and litigation costs.

Finally, a $55 million notable item comes from asset sales and revaluations. This has been driven by losses on insurance liabilities and expenses from discontinued products (totalling $267 million after tax), which were offset by gains on the revaluation of its Zip Co Ltd (ASX: Z1P) holding ($212 million).

What does this mean for its earnings and dividend?

According to a note out of Goldman Sachs, its analysts expect this to lead to cash earnings of $2,535 million for FY 2020. This represents a 63% decline on the prior corresponding.

From these earnings, the broker expects Westpac to pay a final fully franked dividend of 25 cents per share. And given that there was no interim dividend, that amount will be the same for its full year dividend and represents an 85.6% year on year reduction.

Other key metrics of note to look out for are its CET1 ratio and return on equity.

Goldman expects a 704-basis points reduction in its return on equity to 3.7% and a CET1 ratio of 11.1%. This will be up 41 basis points year on year.

Incidentally, the broker has a buy rating and $20.65 price target on Westpac’s shares. This implies potential upside of 15% over the next 12 months excluding dividends.

More reading

• 5 things to watch on the ASX 200 next week
• Reserve Bank tipped to cut rates to record lows next week
• RBA will cut rates Tuesday, say 67% of experts
• How did the WAAAX shares perform in the last quarter?
• Why I think now’s the time to buy bank stocks after ANZ Bank’s (ASX:ANZ) shock results

James Mickleboro owns shares of Westpac Banking. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of ZIPCOLTD FPO. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The post What to expect from the Westpac (ASX:WBC) FY 2020 result appeared first on Motley Fool Australia.

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We asked our Foolish writers to pick their favourite ASX shares to buy in November. 

Here is what the team have come up with…

Chris Chitty: Lynas Corporation Ltd (ASX: LYC)

Both the Australian Prime Minister and the United States President have recently spoken about the importance of critical minerals. Owning one of the highest quality rare earth mines in the world, I believe Lynas is in a great position for growth. This ASX share is already the second largest producer of separated rare earth materials worldwide and has plans to build additional separation facilities in Australia and the US, both of which have attracted government support.

With rare earths in short supply and government subsidies available, I feel Lynas has an enormous opportunity to grow value for its shareholders. I think today’s Lynas share price offers a great opportunity to investors.

Motley Fool contributor Chris Chitty does not own shares of Lynas Corporation Ltd.

Daniel Ewing: Catapult Group International Ltd (ASX: CAT)

Catapult is a global sports analytics company that provides some of the best sporting teams around the world with its diagnostic technology. You may have seen its products worn by superstars from FC Bayern Munich or closer to home, the Fremantle Dockers.

In recent times, the company has seen impressive earnings before interest, taxes, depreciation and amortisation (EBITDA) growth as its subscription revenue has skyrocketed 21%. Furthermore, as of its FY20 results, the company is cash flow positive. This is important for Catapult to be able to drive growth organically through its impressive research and development team.

Motley Fool contributor Daniel Ewing owns shares of Catapult Group International Ltd.

Tristan Harrison: City Chic Collective Ltd (ASX: CCX)

At the time of writing the City Chic share price is $2.77, which puts it at 21x FY22’s estimated earnings.

There’s no doubt that COVID-19 has impacted City Chic’s growth. But the company has shown it has strong e-commerce credentials. It reported 65% of total sales were online in FY20. It also said that 42% of global sales were in the northern hemisphere.

I think City Chic is an exciting ASX share because of its global growth aspirations. Higher online sales should also help margins over time and the company may soon be able to acquire another US retailer with its excess capital.

Motley Fool contributor Tristan Harrison does not own shares of City Chic Collective Ltd.

Ken Hall: Woodside Petroleum Limited (ASX: WPL)

I think the Woodside share price could be a speculative buy in November. ASX shares in the energy sector have been smashed in 2020 as the COVID-19 restrictions have caused demand for energy in key industries such as travel and manufacturing to plummet.

However, things are looking up on the domestic front. Border restrictions appear set to ease in the coming months and we could see demand start to follow shortly. Globally, challenges remain with significant coronavirus case numbers in the US, Europe and elsewhere.

The Woodside share price is down nearly 50% in 2020 and I think November could represent an opportunity to buy in at a good price.

Motley Fool contributor Ken Hall does not own shares of Woodside Petroleum Limited.

Aaron Teboneras: CSL Limited (ASX: CSL)

I believe biotherapeutics giant, CSL, is one of the highest quality ASX shares you can buy. Its Behring business treats rare and serious diseases, while its Seqirus business provides influenza vaccines.

The global leader expects strong growth in FY21 with increased disease awareness and improved diagnostics. Despite plasma collections being slightly impacted by COVID-19, CSL projects revenue to increase between 6% and 10%.

In addition, the alliance with the University of Queensland and the Coalition for Epidemic Preparedness Innovations (CEPI) is aiming to have a COVID-19 vaccine available in 2021.

Motley Fool contributor Aaron Teboneras owns shares of CSL Limited.

Sebastian Bowen: Telstra Corporation Ltd (ASX: TLS)

For this month’s ASX share pick, I just couldn’t go past Telstra. The Telstra share price is near both its 52-week and all-time lows right now. Whilst that might be distressing for existing shareholders, it also means that the company’s 16 cents per share dividend is reaching an extremely high yield of close to 6% (or 8.5% grossed-up).

Some investors are worried that this dividend is an endangered species, but the company recently confirmed at its annual general meeting that it intends to keep it steady in FY2021 and hopefully beyond. As such, I think Telstra is a great buy today for any investor, but especially those who value hefty dividend income.

Motley Fool contributor Sebastian Bowen owns shares of Telstra Corporation Ltd.

Bernd Struben: Rural Funds Group (ASX: RFF)

More reading

• How La Nina will create unexpected ASX stock winners and losers
• Where to invest $100,000 into ASX shares in November
• Reserve Bank tipped to cut rates to record lows next week
• 3 ASX 200 shares that every investor should own
• How ASX investors can capture these ‘billionaire trends’

The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Catapult Group International Ltd., CSL Limited and Austal Limited. The Motley Fool Australia owns shares of and has recommended Telstra Limited and Rural Funds Group. The Motley Fool Australia has recommended Catapult Group International Ltd. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The post Top ASX shares to buy in November 2020 appeared first on Motley Fool Australia.

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